The gendered impacts of IMF programs and IMF-recommended tax reforms on labour market outcomes in Ghana

Abstract

PURPOSE : This paper examines whether or not gender disparity exists in labour market outcomes during IMF austerity programs with tax conditionality. DESIGN/METHODOLOGY/APPROACH : Annual time series data on the Ghanaian economy from 1990 to 2023 is used. The empirical strategies are the autoregressive distributed lag bounds test and the two-stage least squares instrumental variable techniques. FINDINGS : The main findings indicate that the unemployment gap between women and men widens during IMF programs, especially when tax conditionality is imposed. The evidence also suggests that, besides widening the labour force participation gap, the decline in labour force participation of women is more pronounced than that of men during IMF programs. However, stronger democratic regimes can help reduce these negative effects on women’s participation. PRACTICAL IMPLICATIONS : To address Sustainable Development Goal (SDG) 5, which aims to achieve gender equality and empower women, policymakers may need to incorporate gender considerations into public policy formulation. Particularly, gender indicators must be incorporated in the performance metrics during program design. Additionally, disaggregated data on gendered labour market outcomes must be collected and analysed appropriately to inform policy. ORIGINALITY/VALUE : This paper presents a unique case for developing countries, particularly in the Ghanaian context, due to the frequency and multiplicity with which IMF bailouts are sought. Besides focusing on unemployment and labour force participation gaps as outcome variables, gendered disaggregated data and interactive regressions are also employed to enhance the depth of the analysis.